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2. The table shows the production function of Kafka Caf. Kafka's pays $200a day to rent a commercial oven and pays $20a day for a
2. The table shows the production function of Kafka Caf. Kafka's pays $200a day to rent a commercial oven and pays $20a day for a baker. Labour Output (trays per clay) (bakers Plant 1 Plant 2 Plant 3 Plant 4 day) 1 6 10 13 15 2 10 15 18 20 3 13 18 22 24 4 15 20 24 26 5 16 21 25 27 Ovens 1 2 3 4 (number) a. Determine Kafka's fixed costs (FC), variable costs (VC), and total costs (TC) for each plant. b. Determine Kafka's average fixed costs (AFC), average variable costs (AVC), average total costs (ATC), and marginal costs (MC) for each plant. c. Graph the ATC curves for Plant 1, 2, 3, and 4. Indicate the long-run average cost (LRAC) curve on your graph. d. What is the longrun cost of producing 13 trays per day? How many ovens should Kafka's rent in the long run in order to produce 13 trays per day? e. What is the longrun cost of producing 24 trays per day? How many ovens should Kafka's rent in the long run in order to produce 24 trays per day? f. What is Kafka's minimum efficient scale? What is the range of output over which Kafka's production function exhibits economies of scale? What about diseconomies of scale? What about constant returns to scale
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